Vow suffered $1.2m exploit, token plunged 80%

Decentralized coupon issuer Vow recently suffered an exploit that brought its native token to the brink of collapse.

According to a CertiK report shared with Crypto.news, Vow was exploited for $1.2 million shortly after the platform tested a rate-setting function on August 13.

According to Vow’s X post, the test took between 15 and 30 seconds in total, from changing the rate adjuster to reverting it back to its normal setting. The report notes that during the test, “the amount of vUSD received per VOW token was changed from 1 to 100.”

Subject: Update on Recent Market Events and Ongoing Efforts

Dear Community,

We would like to clarify a recent incident that occurred while our team was testing the USD exchange rate function of the v$ contract to generate v$ for the new lending pool and oracle functions.

— Vow (@Vowcurrency) August 13, 2024

While the team was testing the new rate for a short while, a bot obtained 20 million Vow (VOW) tokens, worth $6.6 million at the time of the exploit, and then swapped the tokens for Ethereum (ETH) on Uniswap V2, bringing the total to 452 ETH, or $1.23 million.

Vow added that the team is working on a fix and has increased the burn rate of the token to 50%. This will help VOW’s circulating supply drop to its normal level.

Update: MVD’s notification of VSR burn rate change is effective immediately

As part of the ongoing measures to reduce the impact of exploitation outlined earlier today, an ecosystem priority is to reduce the amount of discount coupons issued to the government prior to exploitation.

For clarity $OATH There is supply…

— Vow (@Vowcurrency) August 13, 2024

According to Etherscan data, the exploiter still holds the ETH he received from Uniswap.

Unlike most attacks in the crypto ecosystem, the attacker did not deposit the funds into a newly created wallet. On-chain data shows that the attacker address interacted with popular cryptocurrency mixer Tornado Cash around four months ago, on April 23.

At this point, the VOW token is down 80% in the last 24 hours and is trading at $0.06 at the time of writing. The asset’s market cap currently stands at $41 million.

VOW price – August 14 | Source: CoinGecko

The fear surrounding the attack led to a 1,400% increase in VOW’s daily trading volume, reaching $12 million.

According to a June report from Crystal Intelligence, the cryptocurrency ecosystem has lost nearly $20 billion to hackers and scammers since 2011. In the second quarter of 2024 alone, the industry fell victim to 72 incidents, losing $572.7 million to malicious actors.